KFC to add 150 restaurants in Russia after 48% sales surge
By Bloomberg
A month after being brought back from the dead, Colonel Sanders is off to see more of the world. Or more precisely, Russia and its neighboring countries.
KFC, which restored the cartoon Colonel to its advertising last month after a longer-than-30-year absence, plans to have at least 550 restaurants in Russia and the Commonwealth of Independent States by 2017, the country head of owner Yum! Brands Inc. said Wednesday at a ceremony to mark the opening of its 400th outlet in the region.
“We are offering fast food at competitive prices, which matters in a difficult economic environment,” Oleg Pisklov told reporters at the latest restaurant near Moscow.
Fast food is all the rage in Russia, where a contracting economy and shrinking household incomes have led consumers toward less-expensive restaurants. KFC’s first-quarter sales there rose 48 percent in local currency, the highest growth pace across its geographies, Yum! Brands reported in April. The overall eatery market fell 4.4 percent to 286 billion rubles ($5.3 billion), according to state statistics service Rosstat.
KFC’s Russian expansion mirrors that of rival fast-food chains. Burger King, part of Restaurant Brands International Inc., added 104 Russian restaurants last year, boosting its network by more than 60 percent. McDonald’s Corp. plans to open 50 outlets in the country this year, after adding 73 last year and surpassing 500 restaurants in total last month. It will also spend more on modernizing existing locations.
Pizza Hut
KFC’s plans for the region include opening its first outlet in Belarus this year, according to Pisklov.
Sales growth has been driven by rising restaurant numbers and price increases that were below Russian inflation, Pisklov said. A Sanders chicken burger costs 76 rubles now versus 69 rubles a year ago, according to the company. The 10 percent increase in the price compares with consumer-price inflation that’s running at about 16 percent.
Pisklov confirmed Yum! Brands’ plan to open 300 Pizza Hut outlets in Russia. He declined to give a time frame, citing difficulties in developing a new brand amid a tough economic climate. Last year, Yum! had targeted reaching that goal within three years, according to the Prime news service.
The Louisville, Kentucky-based company plans to bring the Taco Bell brand to Russia some time in future, but has no immediate plans, he said.